Each week Trifecta Stocks identifies names that look bearish and may present interesting investing opportunities on the short side.
Using technical analysis of the charts of those stocks, and, when appropriate, recent actions and grades from TheStreet's Quant Ratings, we zero in on five names.
While we will not be weighing in with fundamental analysis, we hope this piece will give investors interested in stocks on the way down a good starting point to do further homework on the names.
The maker of railroad freight cars clearly is rolling over, and there is time to capture some more downside. The cloud is turning bearish and money flow is already bearish, with a Moving Average Convergence Divergence (MACD) rollover.
There are some support areas here but they are tepid; the Relative Strength Index (RSI) is signaling more weakness to come. If short, look to target low $20s but put in a stop at $30.
This stock is very weak.
There's nothing like a double rollover to really get your juices flowing. The stock of this software developer got clobbered in early September and ran sideways and just recently rolled down.
Where does it stop? Probably at the gap from April, which is a good 10% lower from current prices. RSI is steep down and the money flow is bearish, with MACD on a sell signal.
We know the drill -- short this stock to the low $30s, put in a stop at $40.
This commentary is an excerpt from "5 Bearish Bets" a weekly feature sent to subscribers of Trifecta Stocks. Click here to learn more about this portfolio, trading ideas and market commentary product.
Want to find out the other stocks we think look good short this week and how to play them? Click here for a trial subscription to Trifecta Stocks and get "Bearish Bets" each week!
-- Bob Lang and Chris Versace are co-portfolio managers of Trifecta Stocks.